388 F.2d 821 (2nd Cir. 1968), 132, Petitions of Kinsman Transit Co.

Docket Nº:132, 30857.
Citation:388 F.2d 821
Party Name:Petitions of the KINSMAN TRANSIT COMPANY, as Owner and Operator of the STEAMER MacGILVRAY SHIRAS, and of the Midland Steamship Lines, Inc., as Owner and Operator of the STEAMER MICHAEL K. TEWKSBURY, their engines, etc., for Exoneration from or Limitation of Liability, and Consolidated Cases. v. CITY OF BUFFALO, Respondent-Appellee, Continental Grai
Case Date:January 18, 1968
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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388 F.2d 821 (2nd Cir. 1968)

Petitions of the KINSMAN TRANSIT COMPANY, as Owner and Operator of the STEAMER MacGILVRAY SHIRAS, and of the Midland Steamship Lines, Inc., as Owner and Operator of the STEAMER MICHAEL K. TEWKSBURY, their engines, etc., for Exoneration from or Limitation of Liability, and Consolidated Cases.

CARGILL, INCORPORATED and Cargo Carriers, Inc., Claimants-Appellants,

v.

CITY OF BUFFALO, Respondent-Appellee, Continental Grain Company, Respondent-Appellee.

No. 132, 30857.

United States Court of Appeals, Second Circuit.

January 18, 1968

Argued Dec. 11, 1967.

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David C. Diefendorf, Buffalo, N.Y. (Raichle, Moore, Banning & Weiss, Buffalo, N.Y., of counsel), for claimants-appellants.

Edward J. Desmond, Buffalo, N.Y. (Anthony Manguso, Corp. Counsel, City of Buffalo, Desmond & Drury, Anthony Manguso, John E. Drury, Jr., Buffalo, N.Y., of counsel), for respondent-appellee, City of Buffalo.

Roy P. Ohlin, Buffalo, N.Y. (David S. Jackson, Ohlin, Damon, Morey, Sawyer & Moot, Buffalo, N.Y., Mendes & Mount, New York City, of counsel), for respondent-appellee, Continental Grain Co.

Before KAUFMAN, ANDERSON and FEINBERG, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge:

The difficult question presented by this appeal is whether certain expenses incurred by claimant-appellants Cargill, Inc. (Cargill) and Cargo Carriers, Inc. (Cargo Carriers), as a result of an unusual concatenation of events on the Buffalo River during the night of January 21, 1959, are recoverable as a matter of law.

The misadventures leading to the catastrophe on the river that fateful evening were set forth when this litigation was previously before this court, 338 F.2d 708 (1964). For our purposes it is sufficient to state that as a result of the negligence of the Kinsman Transit Company and the Continental Grain Company the S. S. MacGilvray Shiras broke loose from her moorings and careened stern first down the narrow, S-shaped river channel. She struck the S. S. Michael K. Tewksbury, which in turn broke loose from her moorings and drifted downstream-- followed by the Shiras-- until she crashed into the Michigan Avenue Bridge. 1 The bridge collapsed and its wreckage, together with the Tewksbury and the Shiras, formed a dam which caused extensive flooding and an ice jam reaching almost 3 miles upstream. As a result of this disaster, transportation on the river was disrupted until approximately March 13, 1959--a period of about 2 months. Subsequent to our previous

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adjudication of the negligence issues, Judge Burke appointed a Commissioner to determine the damages of the various claimants.

At the time of the accident, Cargill had some 336,000 bushels of wheat stored aboard the S. S. Donald B. Gillies berthed in the Buffalo harbor below the Michigan Avenue Bridge. (It is apparently not an uncommon practice for companies to 'winter storage' wheat in this manner.) Cargill, it appears, was under contract to deliver 124,000 bushels of the Gillies' wheat during the period from January through March 1959. Because of the accident the vessel could not be moved to Cargill's grain elevators located above the collapsed bridge so that it could be unloaded. In order to comply with its contractual obligations, Cargill was required to secure replacement wheat in the Midwest. 2 The Commissioner allowed Cargill $30,231.38 for its extra transportation costs and $8,232 for increased 'storage costs.' 3

Cargo Carriers' claim is somewhat different. When the calamity occurred it was in the process of unloading a cargo of corn from the S. S. Merton E. Farr at elevators located above the Michigan Avenue Bridge. Apparently the Farr was struck by one of the two free-drifting ships. Its cargo was undamaged but it broke loose from the dock at which it was moored. The by-product of this was that an ice jam formed between the Farr and the dock and normal unloading became impossible; the city fireboat and the harbor towing tugs which ordinarily would have broken up the ice jam were below the bridge wreckage and thus could not be of any assistance. The consequence of all this was that Cargo Carriers, which was under contract to transfer 10,322 bushels of the Farr's corn, was required to continue the ship's unloading with the aid of specially rented equipment. The Commissioner awarded it $1,590.40 for these incurred expenses.

Judge Burke refused to confirm either the Gillies or the Farr awards made by the Commissioner. He reasoned that the evidence established that the damages to Cargill and Cargo Carriers were caused by negligent interference with their contractual relations. In the absence of proof that the interference was intentional or with knowledge of the existence of the contracts, he concluded recovery could not be grounded in tort. Robins Dry Dock and Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927). We too deny recovery to the claimants, but on other grounds.

We do not encounter difficulty with Judge Burke's analysis because it lacks some support in the case law; instead, we hesitate to accept the 'negligent interference with contract' doctrine in the absence of satisfactory reasons for differentiating contractual rights from other interests which the law protects. The argument, frequently heard, that to allow recovery in such instances would impose a penalty far out of proportion to the defendant's fault or open the field to collusive claims and increased litigation, see Prosser, The Law of Torts, 964 (3d ed. 1964), which are the spectres commonly raised whenever the law extends its protection. Here, as elsewhere, the answer must be that courts have some expertise in performing their almost daily task of distinguishing the honest from the collusive or fraudulent claim. And, 'if the result is out of all proportion to the defendant's fault, it can be no less out of proportion to the plaintiff's...

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